Does the blacklist means to block another member from communicating with me permanently or to report the member?
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No, it doesn't prevent the user from communicating with you. It just allows you to make a computer-processable statement that you don't trust that account. Here's an example usage: say you accidentally send funds to an account called bloctrades when you meant to send it to blocktrades. To prevent that ever happening again, you could put "bloctrades" on your blacklist, so that your wallet would warn you if you mistype it again.